26 June 2014 Last updated at 05:57

Business Live: Thursday 26 June

    Simon Tulett Business Reporter

    Good morning from the live page team. All eyes are on the Bank of England today, with many expecting it to announce measures to cool the housing market in parts of the UK. We'll bring you the press conference live. And we'll have much more, including US fraud charges against Barclays, between now and 13:00.

    HOUSE PRICES 06:03: Radio 5 live

    House prices are the big theme on Wake Up to Money. The Bank of England will say later what actions - if any - it might take to cool the market. But John Earnshaw, a mortgage broker in Lancashire, says the local market is "fairly sluggish" and that people want to move "but are finding it a lot harder to get the finance in place".

    HOUSE PRICES 06:07: Radio 5 live

    Richard Donnell, research director at Hometrack, tells Wake Up to Money that the central London market is starting to cool. The UK has been a two-tier market with a lot of London sales cash-driven, he says. But there are signs things could be changing.

    HOUSE PRICES 06:12: Radio 5 live

    The glamour of radio. For Wake Up to Money's housing special Steph McGovern has been in the Lancashire village of Ribchester, where a local resident in a dressing gown has just told her off for being too loud.

    HOUSE PRICES 06:20: Radio 5 live

    Matthew Pointon, property expert at Capital Economics, tells Wake Up to Money that in some areas of London prices have risen 25-30% year-on-year, and conditions are boom-like. But he explains a 'boom' is different to a 'bubble', because we don't know yet if prices will burst or be sustainable.


    A lot of the business pages this morning are leading on those fraud allegations against Barclays in the US. On Today Paul Kavanagh, from Killik & Co, says the accusation is that Barclays has "fallen short" of its "very serious regulatory responsibilities".

    HOUSE PRICES 06:43: Radio 5 live

    With the Bank of England set to announce what actions - if any - it will take to cool house prices, Lancashire mortgage broker John Earnshaw reminds listeners to Wake Up to Money that not everyone finds it easy to get a mortgage. "A lot of people are going to banks and feel like they are banging their heads against a brick wall," he says. "There is not the influx of cash buyers that you get in London."

    CHINA HOUSING 06:52: BBC Radio 4

    Today is comparing the property markets in the UK and China. Economist George Magnus says we should be much more worried about the latter. Following years of growth, the Chinese property market is "drifting into recession", he says. And the impact that could have on its construction industry could knock up to 2% off China's GDP, he adds.


    Talks between Argentina and hedge fund bondholders are continuing as the South American country seeks to avoid defaulting on its debt. Argentina's Economy Minister, Axel Kicillof, is in New York to discuss his country's debt situation with representatives of the Group of 77 developing nations, plus China.

    HOUSE PRICES 07:12: BBC Radio 4

    Alysha Casingena, an estate agent in north London, says she doesn't see any signs of a housing bubble in the capital. No surprises there, then. "I just do not see any signs... we're still reaching higher prices," she tells Today.

    Currys PC World

    Dixons Retail beat forecasts with a 53% rise in annual profit. Last month the firm agreed an all-share merger with Carphone Warehouse, Europe's largest independent mobile phones retailer. Dixons, home to the Currys and PC World chains, made profits before tax of £132.9m.


    Dixons said sales rose 3% to £7.22bn. "We are seeing the early glimmers of a consumer recovery," chief executive Sebastian James says. Predictably, the current financial year has kicked-off with a big jump in TV sales due to the football World Cup.

    DIXONS PROFITS 07:39: BBC Radio 4

    More from Dixons boss Sebastian James on the company's annual results. He tells Today there's been a particular recovery in sales related to housing. "Anything to do with white goods is going really well," he says. More evidence of a pick-up in consumer confidence?

    MARKET UPDATE 07:45:

    Tokyo stocks closed 0.27% higher on Thursday, tracking gains on Wall Street, with investors moving in for bargains following the previous day's sell-off. The benchmark Nikkei 225 index gained 41.88 points to 15,308.49.

    Royal Family

    The Monarchy cost everyone in the UK a little over one penny per week in the last financial year, according to the latest Royal Family accounts. That's more than £35m in total, with about one third of the grant spent maintaining royal palaces. The Sovereign Grant, which covers the costs of the Queen's official duties, will reach £40m next April.

    Carphone Warehouse

    We've also had figures from the other half of what will become Dixons Carphone - Carphone Warehouse. It's also reported a big jump in annual pre-tax profits, rising to £67m in the last year, from just £3m in 2013. It also reported like-for-like revenue growth of 5.3%.


    Investors have taken fright over that fraud lawsuit in New York against Barclays. Shares in the bank were down more than 4% a few minutes into trading.

    CHINA HOUSING 08:22: BBC Radio 4
    China housing

    Rob Young is shown around an "extravagant" apartment in Hangzhou, in eastern China, on Today. Like many other new homes in the area, it's dropped sharply in price in the last few years. That's because there's an over-supply problem in China, as banks tighten up on credit and buyers wait for prices to drop further amid fears of a government property tax.

    London Stock Exchange

    The London Stock Exchange is to buy US asset manager Frank Russell for $2.7bn (£1.6bn). The deal means the LSE will oversee $9tn worth of equities and assets. The LSE says it plans to raise $1.6bn through a rights issue to help fund the purchase.

    HOUSE PRICES 08:41:

    With the house market a big theme of the day, a reminder that you can check where you can afford to live - and if it would be cheaper to rent or buy - by using the BBC's housing calculator. Click here.


    More on those Barclays allegations, this time from BBC Business editor, Kamal Ahmed. He tells Today there are suggestions the bank's complicated "dark pool" trading was conducted unfairly. But, he adds, "some would argue these are sophisticated investors, and if you get into a dark pool and you find some sharks you shouldn't be surprised".

    HOUSE PRICES 09:02: BBC Breakfast
    house hunter

    Adam Parsons is in south east London for Breakfast to take a look at the capital's booming property market. Paola, who's been house-hunting for more than a year, says the competition is now so great that people are having to make instant decisions. "You don't get time to think about it," she says. Paola has put in an offer on a house even though renovations are not finished.

    GATWICK PROFITS 09:09: BBC Radio 4
    Plane at Gatwick Airport

    Gatwick Airport's boss Stewart Wingate has been arguing that it, rather than Heathrow, deserves another runway. He tells Today he thinks Gatwick is the cheapest, quickest option. "We think London deserves two world class airports - why settle for just one?" Gatwick has also reported pre-tax annual profits of £85.8m and record passenger numbers of almost 36 million last year.

    HOUSE PRICES 09:24: Via Blog Robert Peston Economics editor

    Blogs: "The dilemma for the Bank (of England) is how to snuff out dangerous price rises in London without killing off the green shoots of a much milder housing-market recovery in the rest of the UK."

    WOMEN ON BOARDS 09:35:

    The FTSE 100's last all-male board is no more - Glencore has appointed Patrice Merrin as an independent non-executive director. Business Secretary Vince Cable had previously called the firm's all-male board a "disgrace". Women now account for more than 20% of board members in FTSE 100 firms, according to research published earlier this year.

    HOUSE PRICES 09:45: BBC Breakfast

    House prices are soaring in London, but it's a different story in Ribchester, Lancashire, where Steph McGovern reports for Breakfast that a homeowner in this street has been trying to sell for a year. The owner has just reduced the price of her three-bedroom detached house by £25,000 to £249,950 to get more people through the door.

    HOUSE PRICES 10:02: BBC Breakfast

    In about 30 minutes, the Bank of England will say what - if anything - it will do about soaring property prices. But here's a graphic illustration from Breakfast that not all areas have a problem. London's red hot property market is up 20%, but vast swathes of the UK have seen a moderate, or even no rise.

    DIXONS CARPHONE 10:21: Via Email

    Julie Palmer, retail expert at Begbies Traynor, comments on strong results from Dixons and Carphone Warehouse, and the companies' merger: "I expect following their success, we'll see similar strategic mergers from major high street names looking to bolster their proposition in today's fast evolving retail environment."

    Mark Carney

    Measures to cool the housing market in parts of the UK are expected in the Bank of England's Financial Stability Report. Watch it on the business live page in 10 minutes.


    The Bank of England does not believe household indebtedness poses an "imminent risk" to stability, governor Mark Carney says. But time and again we've seen "how quickly responsible (lending) can turn to reckless", he adds.


    Two new measures are recommended:

    • A new affordability test where mortgage lenders should assess if borrowers could still afford to repay their mortgage if interest rates were three percentage points higher than at the time of the loan.
    • No more than 15% of a lender's total number of residential mortgages should be at, or greater than, 4.5 times the borrowers' income.
    STABILITY REPORT Via Twitter Robert Peston Economics editor

    tweets: "Carney concedes that Bank of England's proposals today will have no impact on today's housing market."


    "If yesterday you went into a bank or building society and were approved for a mortgage, you will still be approved for that mortgage today," Mark Carney says. But, he adds, you "can have more confidence in the durability of the expansion."


    Mr Carney is content that there will be no immediate impact on the housing market. He just does "not want to see a change from today's responsible lending shift into reckless lending".


    Cash purchases in London's housing market account for about 3% of the overall market volume and 8% of transaction values, Mark Carney says. "It's important but should be kept in some perspective," he adds.

    George osborne

    Chancellor George Osborne says he's behind the cap on high loan-to-income mortgages. "I fully support this action by the Bank of England's new Financial Policy Committee to use the new powers we have given them," he adds. Mr Osborne also said he would apply the new mortgage limits to every loan in the Help to Buy mortgage programme.

    STABILITY REPORT 10:55: Via Blog Robert Peston Economics editor

    The Bank sees no dangerous bubble now, writes Robert Peston. So apparently a rise in London house prices of circa 20% per annum is not a serious bubble. Read more here.


    Asked whether he's "perfectly happy with a debt-fuelled housing boom", Mark Carney responds: "I wouldn't use the word happy... this is the limit of our tolerance."


    The mortgage cap - where lenders can have no more than 15% of their total mortgage book at loan-to-income values of 4.5 times and above - "starts to be relevant in a year", Mark Carney says.


    Fears that measures announced today could hit the housebuilding sector seem unfounded. Persimmon shares jumped 6.5% and Barratt rose 5.5%. Building materials supplier Travis Perkins rose 3.5%

    ENERGY PROBE John Moylan Industry correspondent, BBC News

    tweets: BBC BREAKING - The energy market is to face a full competition investigation, the industry regulator #OFGEM confirms


    The Bank of England's measures mark a "graduated and proportionate response" to the pick-up in the housing market, Mark Carney says.


    The Council of Mortgage Lenders tweets that "in Q1 9% of loans were for 4.5 times income or more". But for the same period, it adds, "19% of London loans were 4.5x or more".

    HOUSE PRICES Via Email

    Sarah from Cornwall emails to say: "I understand that they need to ensure that buyers can afford their mortgages when the rates go up, but they are just making it far too hard for first time buyers to even get on the property market."


    "These actions don't affect the central outlook for the economy, in fact they make it more likely to happen," Mark Carney says.

    ENERGY PROBE 11:21:

    Ofgem's decision to refer the retail energy market to the Competition and Markets Authority for a thorough investigation will be "an important opportunity to clear the air," said Ofgem boss Dermot Nolan. "There is near-unanimous support for a referral," he says.

    STABILITY REPORT 11:27: Via Email

    Ben Brettell, Hargreaves Lansdown's senior economist, says that today's action gives the Monetary Policy Committee more freedom to keep interest rates were they are. "Despite Mark Carney's recent comments that interest rates could rise sooner than expected, I believe they will remain on hold well into next year," he writes.


    Wage growth is becoming an increasingly important indicator for the Bank of England. If it doesn't rise sufficiently, not only does it impact on the broader economic recovery, but it would also mean the new mortgage cap proposals would "bite quicker", Mark Carney says.


    Measures to cool the housing market are "in everybody's interests, even the person down the road who can't get a mortgage," says Mark Carney. "The shift into risky lending that we've seen in the past gives that temporary boost, but sets up a deeper recession in the future that hurts everybody."

    STABILITY REPORT 11:46: Via Email

    Aengus Collins, UK analyst at the Economist Intelligence Unit, is unimpressed. Mr Carney's "inconsistency on interest rates has sown confusion" and he appears willing to let the property market get still hotter. "For a man who took office last year lauded as one of the most accomplished central bankers of his generation, Mark Carney's performance has been distinctly underwhelming," he writes.

    MORTGAGES 11:53:
    Council of Mortgage lenders graph

    An interesting graph from the Bank of England, via the Council of Mortgage Lenders. It shows the market share of different loan-to-income mortgages. Those over 4.5 times income (the subject of the Bank of England's new cap, and the bottom two lines) have risen to a new peak.


    Standard Chartered shares are down 4.5% following a warning from the bank about lower profits this year after a 20% drop in first-half earnings. Group chief executive Peter Sands said it had been a "disappointing first half" of the year. The bank also said the head of its financial markets business, Lenny Feder, is leaving the role.

    MARKET UPDATE 12:10:

    The FTSE 100 had barely moved at midday, and was down just 6,733.6 points. But that masked some big movers. Housebuilders rose strongly as investors bet that today's Bank of England mortgage measures will not dent housebuilding. Barclays, down 4.7%, was the biggest loser after news of a fraud lawsuit in the US.

    STABILITY REPORT 12:19: Via Email

    Eversheds' London property expert Bruce Dear says that merely confronting mortgage borrowers with more red tape and form-filling wont curb surging house prices. "In the end, the only things that will really cool the market are putting up rates and building thousands more homes - now," he writes.

    STABILITY REPORT Via Twitter Andy Verity Business reporter

    tweets: "Bank of England wouldn't need to limit loan to income ratios if 'affordability tests' were reigning in loans (ie admission that they're not)"

    STABILITY REPORT 12:38: Via Email

    "Carney has done the policy equivalent of raising his figurative eyebrows at the risk posed by people getting too indebted due to rapidly rising house prices," emails Luke Bartholomew, from Aberdeen Asset Management. Thursday's announcement "is another example of the mixed messages" coming from the Bank of England governor, he adds.

    AMAZON BILL 12:45:

    France has adopted a bill that will prevent Amazon and other online giants from offering free deliveries of discounted books, in a bid to support the country's small bookshops. The bill is expected to be signed into law by President Francois Hollande within the next two weeks.

    CARNEY'S WINK 12:56:
    Mark Carney

    A raise of the eyebrows from the Bank of England Governor used to be enough to stop the banks misbehaving, or so the story goes. Well, it looks like the signal of power may be back in fashion, although in a slightly different guise, thanks to Mark Carney. This was his response to a question from BBC economics editor, Robert Peston.

    13:04: Simon Tulett Business Reporter

    And we leave you with that image of a winking Bank of England governor. Join us again tomorrow from 06:00.


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